Let’s face it, the picture of retirement our parents may have had simply doesn’t hold true anymore. Today’s second acts are longer and more active than ever before, with more complex needs. And when it comes to planning for the lifestyle you envision, patience and discipline are also keys to success. While many people seem to think about that one day when they retire, it’s more important to carefully plan ahead of time for all the days that come after.
There are a number of important questions that we discuss with our clients to design a comprehensive personalized plan.
- What will your lifestyle include — travel, volunteering, part-time work or something completely new? (You can only play golf so many days a week).
- What will that lifestyle cost? Contrary to popular belief, your cash flow needs then may not differ substantially from what you spend now. Except for hopefully a mortgage paid off, college expenses over with and perhaps less dry cleaning for work clothes, many of the same cost of living items will likely continue.
- Most importantly, knowing that investment returns are not fixed at a particular rate but will vary from year to year, do you know with any sense of certainty that you’ll have sufficient capital to last both spouse’s lifetimes? We have some nifty tools that use sophisticated probability analysis to determine the odds of having capital remaining at your life expectancy given various assumptions for inflation, return range and expenses.
- What are the Dangers that need to be minimized, Opportunities to be captured and Strengths to be maximized in your situation? Do you have health concerns, disorganized finances or out of date wills? Do you have opportunities to improve your health, contribute to your family’s success or ways to save more for retirement?
- What income sources and/or assets are you counting on to finance your lifestyle? Are all of your assets in pre-tax retirement plans from which all distributions for income will be taxable? We suggest having an after tax pool as well so that taxes are not a function of what you distribute but are controllable from the standpoint of capital gains, interest and dividends.
- How will you meet healthcare expenses?
- Are there certain large expenses that you anticipate like planning for a wedding or sending a child or grandchild off to college?
Everyone has individual needs and goals, and that’s why a successful plan is designed around what is most important to you and accurately depicts the reality of your retirement years in terms of expenses and projected resources.
For a sample of our complimentary Second Opinion on your portfolio to see if you’re on track to achieve your retirement goals, please visit our homepage on our website at www.fleishelfinancial.com